Personalized pricing… myth or reality?

Let's be clear and call it by its other name… surveillance-based pricing!

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• Personalized pricing… what does it cost in the winter?
• Myth🦄 or reality🐴?
• What on earth is the police doing!?
• Self-Defense Guide!

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You know… that strange feeling of being watched by our cell phones when we get an ad for that EXACT paddleboard knitting-yoga class we were talking about with our best friend over a way-too-expensive latte just the day before? 🤔

We all have this feeling that Google is listening to us… (spoiler: it doesn’t even need to—it tracks our online behavior with excessive zeal!) And why, you ask? To sell us as many products as possible, of course! The internet, this giant advertising machine, is increasingly tailoring itself to our buyer profiles.  What if, thanks to artificial intelligence that knows you better than ever, it were now possible to adjust the listed price to make sure you’d buy that Airfryer!?

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Charging Based on Monitoring

🤖🔨 “Sold for $50 more than the regular price for this cheap lightsaber replica to the Star Wars fan in the back of the room!”

Personalized pricing—also known by its affectionate (and more realistic) nickname, “surveillance-based pricing”—involves adjusting the prices of various online goods and services based on your buyer profile. The criteria that AI might take into account include age, gender, financial situation, habits, interests, and even geographic location.  

Combined with those infamous “cookies” that track your browsing data, AI can build a much more comprehensive personalized profile to optimize sales opportunities and, above all… maximize corporate profits!  

Let’s look at a concrete example. Jacynthe 👩, a nurse in her 50s living in Maria, recently downloaded the “I Love Plants ” 💚🪴 and whose Facebook profile description reads “Proud mom of a house jungle,” would probably be willing to pay a lot more for a stylish, trendy flower pot… unlike Raymond, who forgot his wife’s birthday… again… and is frantically searching for a gift online. (Come on, Raymond, you’re better than that!).  Anyway! Maximizing profits through intrusive user surveillance.

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Myth🦄 or reality🐴?

Technology now allows us to use this type of pricing strategy thanks to AI, but are companies actually using this tactic right now? The truth is that such practices are difficult to identify for several reasons!

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• This practice is coming under increasing criticism, and the organizations that use it aren't exactly shouting it from the rooftops.
• To be sure, we would need to ask to see these companies' code and algorithmic practices.
• In practical terms, on our screens, personalized pricing can be confused with dynamic pricing, which involves changing prices in real time based on demand (think of airline ticket prices that fluctuate daily).
• This is still a relatively new phenomenon, and few people are qualified to do their own digging and track down companies that use surveillance-based pricing… but it’s starting!
• It was already fairly well established in B2B (business-to-business) and wholesale circles, but now algorithms are the ones offering you a “deal” you can’t pass up!
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Some investigations and/or class-action lawsuits allege that several companies, such as Instacart, Target, and even Delta, have used personalized pricing.  So does this practice exist in Canada? The disappointing answer is… probably, but it’s hard to know the full extent of it.

One thing is certain: the trend is on the rise and becoming increasingly common among our neighbors to the south, and you can bet this phenomenon will gain momentum on this side of the border.

Why should we be outraged? Well, because this practice dangerously borders on a violation of existing privacy laws (such as Bill 25 in Quebec, for example) and because it is unfair, discriminatory, and misleading.

Well, then! To arms, citizens—form battalions to fight against the theft of our personal data!  

Um… it’s a little more complicated than that, since… personalized pricing—or pricing based on monitoring—isn’t officially illegal.

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Is it a bird 🦤? Is it a plane ✈️? No, it’s Super Consumer Protection🥊!

As well as its partner… the Government of Manitoba ?

The problem with the emergence of new technologies is that there is a lag between the phenomenon’s emergence, public awareness of it, and the establishment of guidelines or laws. So, for now, it is citizens and various organizations dedicated to consumer protection and competition oversight who are sounding the alarm and urging governments to remain vigilant.

Here in Canada, the Consumers’ Union has called on the federal government to impose a moratorium on the use of AI-powered pricing algorithms.  Taking an even more progressive stance, the Manitoba government has enacted Bill 49, which designates “the use of data to increase prices as an unfair trade practice” to prevent abusive price increases, particularly for groceries and essential goods.

We hope that the authorities will quickly follow suit and take action to curb the rise of surveillance-based pricing.

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A quick self-defense lesson? Cowabunga! 🍕

But as individuals, what can we do to protect ourselves against this kind of pricing and hope to avoid getting caught? Tracking-based pricing feeds off all your browsing data, so here are a few tips to help you be as “ninja-like” as possible on your browsers.

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• Reject cookies as much as possible.
• Use a browser that is less commercial, such as Firefox, Brave, or Safari, for example.
• When you shop online, you can open an incognito window.
• Clear the cache and delete cookies. See how to do it.
• If you're a bit more tech-savvy, use a VPN (virtual private network).
• Avoid clicking on ads on websites that seem a little shady.

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You can also run tests if you suspect a case of surveillance-based pricing.

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• By logging out of your customer account and checking the prices again.
•  Ask a family member whose situation is very different from yours to check the price on their end.
• By staying more vigilant when shopping in the aviation, hospitality, and booking industries, as well as in retail and other sectors, etc.

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And, of course, stay on top of political developments, sign petitions, report cases with supporting evidence to the Consumer Protection Agency, spread the word about this issue to those around you, and follow the Websimple blog for more relevant articles on digital self-defense😉.

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In conclusion

So, in summary, personalized pricing—or price discrimination based on surveillance—is a real phenomenon that is difficult to track at the moment, but it is clearly gaining momentum, and it will be up to us to pressure governments (and thus companies) to take action by enacting legislation to protect the public.

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Well, just as I'm writing this blog post, the price of my ticket to Paris has just gone up by $100... 🤔 Does that happen to you, too, or not?

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✏️ This Websimple blog post was written by a human (Jozi) and edited by AI (Claude)
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